J EXERCISE 3–5 Prepare T-Accounts [L05, L07] Granger Products recorded the follo
ID: 2534512 • Letter: J
Question
J EXERCISE 3–5 Prepare T-Accounts [L05, L07] Granger Products recorded the following transactions for the just completed month. The company had no beginning inventories. a. $75,000 in raw materials were purchased for cash. b. $73,000 in raw materials were requisitioned for use in production. Of this amount, $67,000 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $152,000 were incurred and paid. Of this amount, $134,000 was for direct labor and the remainder was for indirect labor. Additional manufacturing overhead costs of $126,000 were incurred and paid. e. Manufacturing overhead costs of $178,000 were applied to jobs using the company's prede- termined overhead rate. f. All of the jobs in progress at the end of the month were completed and shipped to customers. g. Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Required: 1. Post the above transactions to T-accounts. 2. Determine the cost of goods sold for the period.Explanation / Answer
Rreq 1 RAW MATERIAL INVENTORY Balance 0 Work in Process 67,000 Cash 75,000 manufacturing OH 6,000 balance ending 2,000 MANUFACTURING OVERHEADS Raw material Inv. 2,000 Work in Process 178,000 Manufacturing Wages 18,000 Cash Account 126,000 Cost of Goods sold 32,000 balance Nil MANUFACTURING WAGES Cash 152,000 Work in Process 134,000 manufacturing Ohh 18,000 WORK IN PROCESS INVENTORY-REFINING Balance 0 Finished Goods Inventory 379,000 Raw material Inv. 67,000 Mfg wages 134,000 Manufacturing Overheads 178,000 Balance 0 FINISHED GOODS INVENTORY Balance 379,000 Cost of Goods sold 379,000 Balance 0 COST OF GOODS SOLD Finished Goods Inv 379,000 Manufacturing OH 32,000 Balance 347,000 Rreq 2: Adjusted cost of Good ssold: Cost of Good ssold transferred from Finished Goods inventory 379000 Less: Over-applied overheads adjusted in cost of goods sold 32000 Adjusted cost of Good ssold: 347000
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